Equity Release

The versatility and number of products available for those in retirement, or even aged over 55 years has increased significantly in recent years. At Emerald Finance we provide advice on all the different products in the Later Life market, including Equity Release, Lifetime Mortgages, Retirement Interest Only mortgages (RIO’s) and also standard interest only mortgages where the lenders allow.

As an award winning firm in this sector, all our advisers hold the CeMAP and CeRER qualifications meaning they can explain all the options and offer advice on the best solution for your personal circumstances to ensure you understand the scheme that is best for your needs. We encourage you to involve your family in the decision-making process as releasing money from the home will affect the amount that you will be able to leave in inheritance. If you don’t have family you would be welcome to have a trusted friend or adviser present at any meetings we may have.

Emerald Finance and our Advisers are credited members of the Equity Release Council and our Managing Director sits on their Adviser Forum, supporting advisers across the UK with these products. The Equity Release Council represents all parties that work in this space and promote best practice through their standards and as a rule should always try and get a scheme and use an adviser that falls under their remit.

The products break down primarily as follows:

Lifetime Mortgage, Lump Sum – Funds are released based on your age and property value and you may not need the full amount offered. The lifetime mortgage runs for your lifetime and typically ends either on death, permanent move to care or sale of the home. The rates are usually fixed for life so you know what your interest rate will be for the full term, and as a result how much interest will be charged. Interest can either be paid each month, in part or full, or alternatively no payment has to be made and the debt will accrue on top of the original monies released. Funds can be released for almost any legal purpose but typically are used to clear an existing mortgage where the lender wants their money back, for clearing debts, helping family onto the property ladder with an early inheritance, or to pay for items such as home improvements, a new car, and those bucket list holidays. At the end of the scheme any equity left belongs to you and you remain the owner of your home at all times. These schemes will affect the amount of inheritance you will leave behind and its vital to see an illustration to see the impact this will have. We also recommend family or a trusted friend are involved in discussions where possible, and should you wish to do so.

Drawdown Lifetime Mortgage – this has the same features as a lump sum lifetime mortgage but rather than take all the funds in one go, you can take an initial smaller amount, and then draw down further funds from a pre agreed facility as needed. This can be very effective when you need money now to pay some urgent bills for example, and then want money available should any further home repairs come up over your lifetime. They are often also utilised to help finance retirement where funds can be drawn down as needed to supplement income when pension income isn’t enough. This is typically used when someone is asset rich but cash poor as it enables you to release equity from your home but still stay there. The rate is set for the initial mortgage and then for each further drawdown the rate available at that time will be applied which may be more or less than the initial loan. An illustration will be provided each time so you can make a fully informed decision.

Retirement Interest Only – This is simply a mortgage where you just pay the interest on the money you owe and paying the interest is compulsory.  The amount you can raise is assessed on income from work or pensions, depending on provider and term. Typically rates are set for a defined period of time, such as 2, 5 or 10 years which changes with provider in line with the market. At the end of each period you are free to remortgage to another scheme or switch to a lifetime mortgage for example. At the end of the overall mortgage term the loan will need to be repaid. This is good where you can afford your mortgage on an interest only basis and want to ensure the debt stays the same. Funds can be used to repay an existing mortgage or for any legal purpose such as a new kitchen or bathroom, home improvements, a car, clearing debts, holidays or gifting to family for example. This is very similar to a normal interest only mortgage except that lenders assess this differently as it’s a product taken in retirement and not one that must end by age 75 / 80 / 85 years.

Interest Only mortgages – please see our mortgage page. These can be offered to certain clients up to the age of 85 years depending on personal circumstances.